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Value Investor
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Cabot Undervalued Stocks Advisor Special Bulletin

One stock reports a slight first quarter earnings beat; and another moves from Strong Buy to Hold.

Today’s news: Comerica (CMA) reports slight first quarter earnings beat; Alphabet (GOOGL) moves from Strong Buy to Hold.

Comerica (CMA) reported first quarter adjusted earnings per share (EPS) of $1.54 this morning when the market was expecting $1.53. As expected, both interest rate increases and lower income tax rates contributed to quarterly financial successes, as did expense control and a decrease in non-performing loans. The lackluster loan growth was anticipated by analysts, and is expected to improve in the second quarter. Comerica’s profits are more enhanced by interest rate hikes than those of its peers. Next up: a late-April annual dividend increase. Buy.

Alphabet (GOOGL) moves from Strong Buy to Hold as it nears my price target of 1,190. I will soon sell GOOGL in favor of a more undervalued growth stock. (The company will report first quarter results on April 23. Be aware that it’s common for stocks that run up quickly prior to the earnings report to subsequently fall once earnings are reported – even if the quarterly numbers are better than expected.) Longer-term investors should feel comfortable holding Alphabet, because earnings growth projections currently remain strong through 2020. Hold.